1. Weekly News

Europe

European Avocado Imports Surge 23% YoY Amidst Decline in Peruvian Supplies

Avobook, a leading source for fresh produce market insights, reported a 23% year-on-year (YoY) increase in European avocado imports for W29. Despite this growth, prices remained steady. Peruvian avocado volumes in China fell by over 50% YoY despite Peru's historical market dominance. Mexican avocados hold a 40% market share in the United States (US), with California contributing 28% and Peru accounting for 24%. Additionally, the report notes a slight decrease in avocado prices in the US market compared to the previous week.

New Zealand

New Zealand Avocado Industry Set for Stronger Exports After Weather Disruptions

The New Zealand avocado industry anticipates a rebound in export volumes this 2023/24 season following two years of weather-impacted crops. With early crop estimates returning to more typical levels, the industry is preparing to export approximately 2 million cartons to Asia and North America. At the same time, Australia and the Pacific Islands will receive smaller volumes. Last season, Cyclone Gabrielle drastically reduced production to just over 1.3 million Class 1 export cartons, marking a ten-year low. As Australia expands into new markets such as India and Thailand, New Zealand aims to highlight its avocados' unique taste and quality to stand out in the competitive global market.

Peru

Peruvian Avocado Export Value Rises Despite Volume Drop in Q2-24

In Q2-24, the Peruvian avocado export season ended positively despite a decrease in volume. Peru exported 286.3 thousand tons of avocados valued at USD 559 million, reflecting a 14% YoY drop in volume but a 12% YoY increase in value. While significant buyers reduced their purchases due to lower Peruvian supply, the higher average prices helped offset this downturn. Peru's primary markets remained the Netherlands, Spain, and the US. The Netherlands imported 88.6 thousand tons for USD 171 million, showing a 17% YoY decrease in volume but a 13% YoY increase in value. Spain purchased 54.8 thousand tons for USD 107 million, reflecting a 6% YoY drop in volume but a 28% YoY rise in value.

South Africa

South Africa Ships First Avocado Container to Japan

South Africa recently achieved a significant milestone by exporting its first container of avocados to Japan in W29. Departing from Durban, KwaZulu-Natal's largest city, this avocado export adheres to Japan's stringent cold treatment protocol of 2°C for 19 days. Following an agreement at the Brazil, Russia, India, China, and South Africa (BRICS) Summit, South Africa has become the third African country to export avocados to China. In 2024, South African avocados reached India by air, with sea shipments anticipated soon.

2. Weekly Pricing

Weekly Avocado Pricing Important Exporters (USD/kg)

Mexico

In Mexico, avocado prices decreased by 9.76% week-on-week (WoW) to USD 5.04 per kilogram (kg), down from USD 5.58/kg in W29. This significant drop is due to a temporary supply increase as there are adjustments in harvesting schedules. Despite this short-term decline, prices rose by 11.95% month-on-month (MoM), indicating that the overall trend remains upward. This monthly increase reflects sustained demand and ongoing supply constraints. Moreover, the broader upward trend continues, driven by long-term factors such as recent climatic impacts on production and persistent supply issues, which continue to exert upward pressure on prices.

Peru

Avocado prices in Peru surged significantly, with a 12.96% WoW increase to USD 0.73/kg in W30, an 18.22% MoM rise, and a substantial 59.04% YoY increase. Several factors drive this sharp price rise. Adverse climatic conditions, including irregular rainfall and extreme temperatures, have stressed avocado crops and impacted production. Additionally, issues with root health, water quality, and damage from excess humidity and radiation have further constrained supply. Compounding these challenges are stringent export requirements from destination countries, such as traceability and limits on heavy metals and pesticide residues, which complicate the export process. Together, these factors are reducing avocado supply and pushing prices higher.

Spain

In W30, avocado prices in Spain decreased by 4.60% WoW to USD 5.09/kg, compared to USD 5.34/kg in W29. This decline follows a previous price increase, indicating some stabilization in the market. However, a 42.97% MoM rise reflects continued volatility and high production costs. Despite the recent weekly drop, prices remain significantly higher than a month ago, driven by ongoing shortages and increased import costs. Compared to the previous year, avocado prices are still lower by 25.42%, suggesting that the current market is experiencing less pressure than at the same time last year when supply was relatively higher.

Chile

Avocado prices in Chile remained stable at USD 3.67/kg in W30, with an 8.98% MoM decrease and a 25.16% YoY increase. The monthly decline reflects continued competitive pressure from increased Mexican avocado imports, which elevated supply levels and exerted downward pressure on local prices. Despite the MoM drop, the YoY rise highlights a broader trend of higher prices, driven by reduced domestic production and increased demand. The stable weekly price amidst these fluctuations indicates that while local competition and supply dynamics impact short-term pricing, the overall market remains strong with significant YoY growth.

Colombia

The wholesale prices of avocados in Colombia remained steady again at USD 1.67/kg in W30, showing no MoM change but a notable 35.58% YoY increase. This stability reflects continued strong market conditions and consumer demand. The sustained price level is due to ongoing efforts to boost market visibility and consumer education, which support higher demand for Colombian avocados. Colombia’s commitment to sustainability and eco-friendly practices aligns with global consumer preferences, reinforcing the price premium. The country's diverse production areas, which offer various avocado sizes and characteristics, continue to enhance the market’s appeal and support overall price stability despite significant YoY growth.

4. Actionable Recommendations

Address Avocado Supply and Export Challenges in Peru

Peruvian avocado producers should enhance crop management practices by adopting integrated pest management (IPM) techniques and disease-resistant avocado varieties to combat climatic stress and root health issues. They should also invest in advanced irrigation systems, such as drip irrigation and soil moisture sensors, to ensure efficient water use and mitigate the effects of irregular rainfall. Additionally, collaborating with export partners to streamline compliance with traceability and residue requirements will help stabilize supply and manage rising prices.

Strengthen Market Position Against Increased Imports

Chilean avocado producers should enhance product differentiation and marketing strategies to maintain market strength amidst increased competition from Mexican imports. Product differentiation can be achieved by emphasizing unique attributes of Chilean avocados, such as superior taste, texture, or organic certifications, and leveraging sustainable farming practices. Marketing strategies should focus on creating compelling narratives about the product's origin and quality and investing in targeted advertising and promotions in existing and new export markets. Additionally, producers should optimize production efficiency and explore innovative packaging to manage costs and improve resilience against supply fluctuations.

Enhance Supply Chain Efficiency to Stabilize Spanish Avocado Prices

Avocado producers in Spain should focus on improving supply chain efficiency to stabilize prices. Moreover, they should optimize logistics by adopting technology for better route planning and inventory management, negotiating better terms with suppliers to reduce import costs, and enhancing distribution processes to minimize delays. Implementing these measures will help mitigate the impact of shortages and streamline operations.

Sources: Tridge, Portaldelcampo, MXfruit, Freshfruitportal, Fruitnet